Conventional refinance replaces your existing mortgage with a new Fannie Mae or Freddie Mac conforming loan — lowering your rate, shortening your term, eliminating PMI, or pulling cash out up to 80% LTV. Mortgage-World.com is an independent broker licensed in NJ, CT, and FL shopping 20-plus wholesale lenders to find the lowest conventional refinance rate for your equity position and credit profile.
A conventional refinance replaces your existing mortgage with a new conforming loan backed by Fannie Mae or Freddie Mac. Whether your goal is a lower rate, a shorter term, or tax-free cash from your equity, we shop 20-plus wholesale lenders across NJ, CT, and FL to find the best conventional refinance rate before you commit to anything.
★ Updated June 2026 | Independent Broker | 20+ Wholesale Lenders | Serving NJ, CT & FL Since 2017
Thinking about a conventional refinance? We compare 20+ wholesale lenders to find the lowest rate for your equity, credit score, and loan balance. Get My Conventional Refinance Quote — Free
620 Min FICO Score Conventional Refi
5% Min Equity Required Rate-and-Term Refi
80% Max LTV Cash-Out Refi
$806,500 2026 Conforming Loan Limit
Conventional Refinance — Key Numbers at a Glance | Mortgage-World.com
Your Answer Right Here
What Is a Conventional Refinance?
A conventional refinance pays off your existing mortgage and replaces it with a new conforming loan that meets Fannie Mae and Freddie Mac guidelines. Unlike FHA or VA refinances, conventional mortgage refinance options are not government-insured — they require a minimum 620 credit score and enough home equity to qualify. The payoff depends on your goal: a rate-and-term refinance lowers your rate or changes your loan term without pulling cash out; a conventional cash-out refinance lets you borrow against your equity up to 80% LTV and receive the difference at closing. According to the CFPB, refinancing makes financial sense when the savings on your new rate outweigh the closing costs within a reasonable break-even timeline. As an independent broker we shop 20-plus wholesale lenders so you see the actual market rate — not one lender’s posted rate.
Program Snapshot
Conventional Refinance Options — Rate-and-Term vs. Cash-Out
Conventional refinance breaks into two primary tracks. Here is a side-by-side look at what each program requires and who it serves:
Refinance Type
Max LTV
Min FICO
Max DTI
Best For
Rate-and-Term Refi
97%
620
49.99%
Lower rate, shorter term, remove PMI
Cash-Out Refi — Primary
80%
620
49.99%
Home improvements, debt payoff, investment
Cash-Out Refi — Second Home
75%
640
49.99%
Vacation home equity access
Cash-Out Refi — Investment
75%
620
49.99%
Rental property equity, portfolio growth
High Balance Rate-and-Term
95%
620
49.99%
High-cost counties up to $1,209,750
High Balance Cash-Out
80%
620
49.99%
Bergen, Fairfield, Broward equity access
Streamline LLPA Refi
97%
620
49.99%
Existing Fannie/Freddie loan, reduced fees
Visual Guide
LTV Limits by Program Type — Visual Overview
Your maximum loan-to-value ratio determines how much equity you need and how much cash you can pull out. Here is a visual overview of how LTV limits compare across conventional refinance programs:
Conventional Refinance LTV Limits — 2026 Fannie Mae and Freddie Mac guidelines. LTV and rate adjustments vary by occupancy, credit score, and loan balance.
Full Guidelines
Conventional Refinance Requirements — Credit, Equity & Income
Fannie Mae and Freddie Mac underwriting standards apply to all conventional refinance loans we originate. Here are the key qualifying factors for 2026:
● Credit Score for Conventional Refinance
The minimum FICO for a conventional mortgage refinance is 620. Borrowers between 620 and 679 pay higher loan-level price adjustments (LLPAs), which increase the rate. Scores of 740 or above receive the best conventional refi pricing with the fewest adjustments. Fannie Mae publishes the full LLPA matrix publicly so borrowers can see exactly how their score affects their rate.
● Home Equity Required
Rate-and-term conventional refinances allow up to 97% LTV, meaning you need at least 3% equity. Cash-out refinances are capped at 80% LTV on a primary residence — you must have at least 20% equity after the cash-out is factored in. Second homes and investment properties cap at 75% LTV for cash-out. If you have less than 20% equity, PMI will still apply on the new loan.
● Debt-to-Income Ratio
Standard maximum DTI for a conventional loan refinance is 49.99% under Fannie Mae guidelines. At the max, Desktop Underwriter (DU) may require strong compensating factors — substantial liquid reserves, a high credit score, or significant equity. DTI is calculated by dividing your total monthly debt payments by your gross monthly income.
● Income & Employment Verification
A two-year employment history is required. W-2 employees provide 30 days of pay stubs and two years of W-2s. Self-employed borrowers provide two years of personal and business tax returns. A year-to-date profit and loss statement may be required if the refinance closes after June 30th of a given calendar year. Rental income from the subject property or other owned properties requires two years of documented history.
● Reserves & Assets
Most conventional refinances require two months of PITI in verified reserves after closing costs. Investment property refinances typically require six months of reserves. Reserves may be held in checking, savings, 401(k), or IRA accounts — retirement accounts count at 60% of vested balance. Two months of statements are required for all asset accounts used in qualifying.
● Appraisal & Property Condition
Most conventional refinances require a full interior appraisal to establish the current market value of the property. Fannie Mae’s Desktop Underwriter may waive the appraisal on select refinances with strong equity and credit — called an appraisal waiver or Property Inspection Waiver (PIW). The property must be in good condition with no health or safety issues. Condos must meet Fannie Mae project approval requirements.
Is It Worth It?
When Refinancing Makes Financial Sense
A conventional refi is not a one-size-fits-all decision. Here are the most common scenarios where refinancing makes clear financial sense — and one where it does not:
Lower Your Rate
If current conventional refinance rates are at least 0.5% below your existing rate, the monthly savings often justify closing costs within two to three years. The break-even calculation divides closing costs by monthly savings to find your payback period.
Eliminate PMI
If your home has appreciated to the point where you now have 20% equity, refinancing at a lower rate eliminates PMI at the same time — a double savings. On a $500,000 loan, removing PMI alone can save $150 to $200 per month.
Shorten Your Term
Refinancing from a 30-year to a 15-year conventional loan pays your home off faster and saves substantial interest over the life of the loan. The monthly payment goes up, but total interest paid drops dramatically — often by six figures on larger loan balances.
Cash-Out for Home Value
A conventional cash-out refinance up to 80% LTV lets you access equity to fund renovations that increase property value. Kitchen and bathroom upgrades in NJ, CT, and FL markets can return 70 to 85 cents on every dollar invested, making this a strategic use of equity.
FHA-to-Conventional Refinance
Borrowers with an existing FHA loan who now have 20% equity and a 620-plus FICO can refinance into a conventional loan and eliminate FHA mortgage insurance premium entirely — saving the ongoing monthly MIP that stays for the life of an FHA loan. See our FHA loan page for the full comparison.
When to Wait
If your break-even period exceeds the time you plan to stay in the home, a conventional mortgage refinance may not save money. Similarly, if closing costs reset a loan near the start where you pay mostly interest, the long-term savings can be smaller than they appear.
Fannie Mae’s cash-out refinance guidelines are publicly available for borrowers who want to review the equity and eligibility requirements directly from the source.
Lock in a fixed rate conventional refinance for 10, 15, 20, or 30 years. Full guidelines, rate factors, and program details for NJ, CT, and FL homeowners.
New Jersey-specific cash-out refinance guidelines, maximum loan amounts, county-level equity requirements, and how we shop wholesale lenders for the best rate.
Buying a home in New Jersey? Our conventional loan page covers purchase programs, 2026 loan limits by county, and guidelines for Bergen, Essex, and Hudson County buyers.
Refinancing a larger loan balance? High-balance conventional refinance goes up to $1,209,750 in qualifying high-cost counties in NJ, CT, and FL.
What Clients Say
What Our Clients Say About Working With Us
★★★★★
“Chris was the best mortgage person I’ve ever experienced in my life. My refi was very complicated — we must have called him 75 times. He never missed one of my calls. Unbelievable, and we got it done. Can’t thank him enough.”
— Kirk G.
★★★★★
“Chris Luis is the BEST mortgage broker on this planet! If you’re looking to buy a home, definitely give him a call. Chris will go above and beyond to try to help you!”
— Tanya W.
★★★★★
“Julia Luis has been very professional and has been very helpful during the process! Anyone looking for someone to assist them in their future adventures needs to have her on your side! Thank you for being there for me!!”
What credit score do I need for a conventional refinance?
The minimum credit score for a conventional refinance is 620. Borrowers with scores between 620 and 679 face higher loan-level price adjustments that raise the effective rate. Scores of 740 or above qualify for the best conventional refinance pricing. If your score is below 620, an FHA streamline refinance or FHA rate-and-term refinance starting at 500 may be an option.
How much equity do I need to refinance conventionally?
For a rate-and-term conventional refinance, you need at least 3% equity (97% LTV). For a cash-out conventional refinance on a primary residence, you must retain at least 20% equity after the cash-out — meaning the maximum LTV is 80%. Second homes and investment properties require at least 25% equity for cash-out, capping at 75% LTV.
What is the maximum cash-out on a conventional refinance?
On a primary residence, the maximum cash-out conventional refinance allows you to borrow up to 80% of your home’s appraised value. The difference between your new loan amount and your current payoff balance (minus closing costs) is what you receive in cash at closing. There is no absolute dollar cap on cash-out amount — it is limited only by your home value, current loan balance, and the 80% LTV ceiling.
Can I refinance from an FHA loan to a conventional loan?
Yes. If you have at least 20% equity and a 620-plus FICO score, you can refinance from an FHA loan into a conventional loan. The primary benefit is eliminating FHA mortgage insurance premium (MIP), which stays on FHA loans for life if you put less than 10% down. Removing MIP through an FHA-to-conventional refinance typically saves $100 to $300 per month depending on loan balance.
How long does a conventional refinance take?
A conventional mortgage refinance typically takes 21 to 45 days from application to closing. The appraisal is usually the longest step at 7 to 14 days. Fannie Mae’s Desktop Underwriter may issue an appraisal waiver on refinances with strong equity, which can reduce the timeline by one to two weeks. The three-day rescission period after closing applies to all refinances on a primary residence.
What documents do I need for a conventional refinance?
Standard documents for a conventional refinance include two years of W-2s and tax returns, 30 days of pay stubs, two months of bank statements, a government-issued ID, your current mortgage statement, and homeowners insurance declarations page. Self-employed borrowers also provide two years of business returns and a year-to-date profit and loss statement. You will also need the property’s most recent tax bill.
Ready to See Your Conventional Refinance Rate? Let’s Run the Numbers.
Tell us your home value, loan balance, credit score, and refinance goal. We shop 20-plus wholesale lenders and show you the best conventional refinance options side by side — no obligation, no hard pull to get started.
Chris Luis — Broker/Owner, Mortgage-World.com — NMLS #1630225
I have been a licensed loan officer since 2002, guiding homeowners through conventional refinance transactions across New Jersey, Connecticut, and Florida in every rate environment.
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